Foreclosure fallout: squatters 'n skeeters

Funny headline, serious topic: foreclosed homes are often ill-maintained, and sometimes attract squatters and disease-bearing mosquitos, according to David Streitfeld's story in today's L.A. Times .

A big problem is swimming pools that are not properly drained and cleaned when the house is vacated. In the Antelope Valley, Streitfeld reports, mosquito control workers treated 65 pools last month, and hired a surveying company that identified as many as 1,000 that are "green," "half-empty," "murky" or "questionable."

Public officials say they can't just barge in and clean these places up: "'Unless the house is open and vacant, and starting to collect trash and debris, there's nothing we can do,' said Frank Bush, chief inspector for the L.A. Building and Safety Department's Code Enforcement Bureau....   As for the pool, 'you can't drain for the sake of draining,' said department spokesman Bob Steinbach. 'It's the owner's responsibility.'"

Our take: This is disappointing. Isn't there some legal way municipalities can put pressure on lenders and banks to clean these places up?  Why should taxpayers foot the bill for cleanup when these homes are owned by banks?

Comments? Thoughts? E-mail story tips to lalandblog@yahoo.com.

Comments

[Joseph]

Peter, you've hit the nail on the head: owners (read: banks and lenders) should clean up the mess, in all senses of the word. This example is a microcosm of the larger problem, that being the question of who pays for the housing bubble burst. Will it be the "owners", or will we the public be forced to bail them out in direct and/or less direct (e.g., Fed rate lowering, inflation, etc.) ways? We need to push for the former, simply put. The public should NOT foot the bill any more than it already has. Daniel Gross in today's Slate has an excellent article addressing this topic.

Keep up the great work, Peter--I read this blog every day!

[Rich]

Municipal health officials usually have the power to declare public health emergencies that would justify their activity on a property, but it must have the backing of political authorities, who take the heat, and most health and building inspection departments aren't budgeted for anything more than their bare-bones operations. If citizens start calling to demanding it be done, officials will consider doing it...

[Tex]

Perhaps there is a need for some city ordinances, giving public officials more authority in these situations. To me, it seems the easiest thing is to just drain the pools. That's much cheaper than showing up several times a month to pour chemicals in it.

Cities and neighbors do have common law nuisance laws available to them, but municipalities probably don't have the resources for litigation. However, stricter ordinances, authorizing officials to either drain the pools or bill the owners for pool-treatment services, strikes me as being well within the police power of the city.

[investorguy]

Wouldn't Vector Control be able to suck the water out of the pools? They do a great job with standing water on streets, etc.

[Cal]

I wonder if the people in the article taking care of the lawn could ultimately be causing the place to be worth less. The bank could see a well cared for house and not take a lowball offer, if they saw some dirt and brown grass it might get it sold. Getting a house sold sooner rather than later in a depreciating market is the way to go.

Wasn't it the lancaster realtor in this blog somewhere that said that brown grass sells houses (REO).

[Jeremy Miles]

I heard a story on NPR a while ago where they either put a little vegetable oil on the top (blocks the larvae breathing tubes) or popped a few fish in, and the fish ate the larvae. Or both.

Quicker (and cheaper) than draining.

[War]

Peter,

I e-mailed you some interesting info on a foreclosed condo in Santa Monica...not sure if you would post anything or not but I decided to put the info up on the web. Address below.

Since this post mentions foreclosures, the Santa Monica condo that I am talking about apparently doesn't have a kitchen...so either the previous owners stopped in the middle of a remodel or they were pissed and took out all the value they could before getting foreclosed on. As a result, neighbors in the unit are now looking at $100K in equity losses due to the bank pricing much lower than sales as recent as 3 months ago.

I continue to think that the low end (i.e. condos) of Santa Monica is going to show significant weakness going forward. I will occasionally outline examples (the one described above included) on the following site:

http://smdistress.blogspot.com/

Keep up the good work!

[Don]

Leave the water in the pools. At least the homeless squatters have a place to wash and clean up. If not invite them to youre house for a shower. Mosquitoes? Ever hear of a flyswatter? Mind your own business,its not your house. Must be george Bushs fault if it happened in LA.

[Fred]

Don,
The issue with the water in the pool is a new one: west nile virus.
It is carried by mosquitoes and can cause serious disease and death. This is a community issue as it affects many locally.
Fred
p.s. yes, Bush is also responsible (kidding, sort of)

[AnnS]

“Isn't there some legal way municipalities can put pressure on lenders and banks to clean these places up? Why should taxpayers foot the bill for cleanup when these homes are owned by banks?”

Yes there is.

The local government can declare it a health hazard.

The owner (be it the individual or the now the lender on a foreclosure) is given notice that is a health hazard and given a deadline to take care of it.
I
If the owner does no do it, the government comes in and does it.

Then the government puts a lien on the property for the cost of the work.

The lien kind of puts a crimp in the lender selling it – they have to pay off the lien to give clear title. Ergo, the government gets its money back with interest.

It would work on the pool problem and maybe the overgrown lawns (after all vermin can hide there.)

There maybe something in zoning codes about maintaining the property so it is not a nuisance – overgrown grass etc. If there is and the zoning office can enforce the code by notification, then doing the work if it is not done and putting alien on the property you get the same result.

If that is not workable, the neighboring homeowners who are impacted by it could sue the lender/owner for creating a nuisance. And get the court to order the lender/owner to abate the nuisance - cut the lawn, drain the pool, keep out trespassers…. And they could ask for an order allowing them to do the work, bill the owner and put a lien on the property if the owner fails to do as ordered by the court.

Easy enough to find the lender/owner. Go to the courthouse or county records office and look up (1) the name of the mortgagor and/or (2) the name of the entity that foreclosed on it and took title.

[RadioManTodd]

A governing authority can declare an area run down to the point where its a nuisance and after a public hearing vote to have it cleaned up. In doing so the city/county will come in and clean it up and place a lien on the property for the cost of the bill.

I forget the process, and IIRC its usually used on vacant lots, but I don't see why it couldn't be done for any abandoned property.

[RadioManTodd]

OK I'll follow up myself.

Its a nuisance abatement ordinance, and the city declares it, notifies the owner of a public hearing to dispute it, then after the hearing orders it to be cleared, which is handled by the county. Then its billed on the property tax bill.

Burbank did this earlier this year at a meeting I was in attendance at, which I've linked.

http://www.ci.burbank.ca.us/agendas/ag_council/2007/sr030607_2.html

[Fernando Pineda]

Free the price correction! No Federal Bailout! If blight is the price we have to pay, then so be it! Its ridiculous that a college grad who makes 90K a year can't afford a home in the town he grew up in...

[Anon]

Holding the property on lien is a great way for municipalities to make some money on the properties (aside from the high taxes in some areas). Especially if it doesn't become a health risk. "Don" who wrote about minding ones own business... it becomes my business when "crap" comes into my home/yard. "Don", I hope you're not one of those neighbors who keep smelly dog kennels adjacent to the fence and pile trash that over fill to other people's property.

For the college grad making $90K a year. That's $7500 gross per month. You need to learn how to budget or set your expectations a little lower as a first time owner. Spending your money on a $60K Mercedes is your own fault...

[Dr. JwB]

I generally don't comment on people who can't even come up with an original fake name, but . . .

Anon- Do the math! Or if you cannot do math, use the NY Times "Buy vs Rent" calculator (Google: NY Times Buy vs Rent).

If you believe that you shouldnt have more than 1/3 of your income tied up in debts of any kind, even without a "$60K Mercedes", Fernando can't buy a house in many parts of LA (and on the westside he can barely get into a condo).

Lets assume he has 20% to put down (probably not).

At 7%, for 30 years, with 20% down, one third of his income (2500/mo) doesn't even get him into a 500K house. If he grew up in Culver City, well, there are no 500K houses. And heaven help him if he has kids, who want bedrooms of their own.

And most people think 33% of one's income is the absolute limit, and would recommend only 28%. For 2100/month, he can only afford a 400K "home".

So he's either stuck being a renter, or he is in condoland. For many of us who grew up in homes with back yards, a condo is just an apartment. I know many people love condo living, but I'm going to guess that when Fernando says he wants a "home", he really wants a house.

That 400-500K condo can be rented for 1500-2000/month right now (I know, I am actively looking), so he's better off renting and saving.

[John T Watts]

It sounds like, once again, there are some great investment opportunities in Lancaster and Palmdale. What the Antelope Valley still needs is a much more diverse economic base.

Good to hear from JK that Clifton's Cafeteria is still in downtown L.A. Point well taken about the gentrification and unaffordalbility of downtown. Still, doesn't it seem like more and more people may begin to live in the area of tall buildings and things to work at and do within walking distance? How about the new Americana project in Glendale? Sounds interesting.

[matthew]

Up the punks! Squat the homes of the (previously) rich!

[Kerry]

Kudos to AnnS and RadioManTodd for offering actionable solutions to this thorny, emergent problem.

The owner of record should be compelled to shoulder the cost of cleaning the pool and maintaining the safety and security of the property.

Owning property is a gamble - if you can afford it, and live in it, you have quality of life - a win. If you fix it up and sell it (at the right time), you can make a profit - another win. If things don't go your way, you pay what is needed to keep the property safe and not a hazard to others.

Quote: "Unless the house is open and vacant, and starting to collect trash and debris, there's nothing we can do," said Frank Bush, chief inspector for the L.A. Building and Safety Department's Code Enforcement Bureau.

Well, *that* comment lets us all sleep better tonight. 8^p

[mike]

isn't it about time that the laws change so that renters can't sit on a landlords place for 6 months while they destroy it and don't pay rent. they should have to get out as soon as they stop paying rent!!!!!!!!!!!!

[eprobert]

Dr JWB you are absolutely correct about those numbers. We have a household income of $105,000 and there is NOTHING that we could afford based on a normal, conservative 1/3 of income payment. I should qualify that by saying "nothing= no house with a garage in a neighborhood that is not dangerous after dark" I'm not talking westside here, either. Highland Park, Lincoln Heights and El Sereno are all on the table.

However, normally now lenders allow 50% of your income to go for debt, so by that metric, sure, there are some houses we could "afford" by this metric.

But who wants to stay at home every night, have no vacations and have no financial cushion just to say you "own" your not-paid-for house.

Maybe when prices were going up 5% per month, sure, it was "worth it" in a strictly financial sense.

Not now, especially when we can rent a house in a nicer neighborhood (Atwater Village) for $1700/month. I'll take a house here for $1700 over one in El Sereno for $3000 any day!

[yours truly, Johnny Dollar]

A home owners group near the Santa Monica Airport met earlier this week to complain about noises associated with SMO operations. First things, first. These home owners (and area real estate types) knew that these homes were in the Class C airspace before these home owners purchased their homes. The airport noise was there already. They chose to purchase these homes, anyway. SMO can be found on all area street maps, Big Blue Bus maps...airport can even be found on Google Earth. The DC-3 which helped, just a little, win World War II was built by Rose the Riveter at SMO (how soon we forget). And, jets have been "coming and going" to/from SMO since April 1959--that's what they do. These home owners are the little boy who killed his parents; now, he throws himself on the mercy of the court because..he is now an orphan.
And, yes, I am a jet jockey...and home owner.

[No Problemo]

IDEA! The primary reason for so many foreclosures, are the greedy Realtors who will sell an $800,000 house to a homeless person with no money down. I say we solve three problems with ONE solution. Every time a house is foreclosed, Have the city Bill the Realtors involved in the last transaction that resulted in foreclosure, and have them spend this money to provide scrub brushes paint, and gloves so the Realtors can go clean up THEIR mess. Also, it would teach Realtors about the benefits of an honest days work. If they get good at scrubbing and cleaning, we won't have to retrain them in a new profession. They will be busy cleaning the "exclusive estates" in Pacoima that they have been selling.

[difference between a wife and a girlfriend? 55 lbs.]

That's a good idea No Problemo; let's also include making the judges who let out criminals back on the street pay for/serve the time that these criminals are supposed to be doing when they commit additional crimes. When judges are victims, things will change. Hard Time.

[Anon]

DrJwb/eprobert:
You seem like smart people (albeit conservative or gutless).

I've seen the numbers before. Those numbers are much to conservative to the average person. If that was the case, my parents and plenty of people I know would have never been able to afford their homes. That is the REALITY, not theoretical numbers.

Buying a home is a risk just like any investment. Take advantage of the increasing number of foreclosures. You know what, if you have to eat in, bring your lunch to work, take a shorter vacation, nobody will fault you for it. You're building a life, not trying to live a lifestyle. If you want to live that lifestyle, then resign yourself to rent forever because there is always a demand to live in California. Simple economics... supply and demand.

[Cal]

Anon: "Simple economics... supply and demand."

So tell me, how is supply? Demand?

When we are in such disequilibrium between supply and demand what does simple economics tell us?

[Dr. JwB]

Gutless? from someone who calls themselves "Anon"? I laugh. Not that "Dr. JwB" is full disclosure, but come on . . .

And for the record, I am fiscally conservative, if that means not wanting to spend 50% of my monthly income to buy a place that I could rent for half that cost. And if home prices are flat or going down for the next few years (or more as some have posited), then I'm better off with a savings account getting 5.05% at EmigrantDirect on the difference between rent and mortgage. Instead of building equity slowly, I'm building liquidity quickly.

And yes, eventually my 1 year lease is up, and rents go up - then I re-evaluate the situation: Is it still better to rent? If yes, then I do it again, all the while your house is still decreasing or flat in value, and you have no cash on hand for emergencies.

Again, I refer you to the NYTimes buy vs rent calculator. It makes the case quite clearly that in a declining market, renters win, based on robust calculations.

[Sam]

This is unfortunate and will soon be out of control. The nubers will be so high and visible on this it will be one more reason the Fed will bail out.